Public Cloud Storage Can Be Efficient, But the Potential is Still Limited

Public cloud storage can be a cost efficient alternative to rolling your own, but observers warn that it isn’t a cure all.

Price is the lure. Even if you have room in your data center for expansion, in-house storage infrastructure won’t ever be as cost-scalable as a public cloud option, says Forrester analyst Henry Baltazar. And cloud storage will always give you more agility, he says: Once you add storage capacity in your data center, it is likely yours for the life cycle of the equipment.

It is for that reason that “a lot of spending [on cloud storage] today is on that secondary storage stuff,” Baltazar says, what he calls “cheap-and-deep” storage. Businesses can buy a bare-bones cloud storage service for static data that doesn’t need to be accessed very often – say, backup offloading.

IDC analyst Paul Hughes adds there is also significant activity around document collaboration and general file sharing, a la Box and Dropbox. Cloud storage can be viewed as “part of a greater IT transformation that looks to use the cloud as a better way for users to gain access to data,” he says.

Bob Muglia, CEO of data warehousing-as-a-service startup Snowflake, said everybody’s looking to make sure they’re getting the most bang for their buck, and cloud storage offers a potentially potent way to do that.

“The balance that all companies are heading towards is ‘how can I take my existing investment, leverage a set of cloud resources where I possibly can, and do so in a way that increases my efficiency?” he said. “It’s so clearly the direction of the future.”

Practitioners say, however, to be careful when assessing the pricing promises. “The assumptions I see are never realistic,” says Nancy Newkirk, vice president of technology for IDG (the parent company of Network World). And what’s more, the pay-as-you-go model ties your hands a bit when it comes to budgeting. Storage becomes a recurring monthly expense and “you can’t defer any expenses,” she says. “I don’t think it’s a slam-dunk on the cost evaluation.”

Even a rosy 2011 study from Forrester Research – written by then-Forrester analyst Andrew Reichman – which concluded that businesses could see a 75% price reduction using cloud storage, warned that service costs alone aren’t the whole story. Associated costs can be significant. “There are a few gotchas when it comes to measuring the real cost of cloud storage,” wrote Reichman, citing stress on WAN links, transactional charges levied by services for accessing or writing to data stores, and soft dollars associated with service provider performance inconsistencies.

Moreover, concerns about the ability to keep data secured, and secured well enough to comply with government regulations, continue to dampen user interest in cloud storage. “The biggest concern today with cloud is usually compliance and security,” Baltazar says. So you have to start with a threat assessment and a workload assessment.

Very detailed planning is critical for all companies weighing new or expanded cloud adoption, the experts agreed. And if you do make the plunge, then it is important to frequently reassess the situation. “Business who use the cloud ‘smartly’ for public storage are the ones that do frequent ‘audits’ of their usage to make sure that what they are buying best meets their needs,” says IDC’s Hughes.